Embraer May See 150 Regional-Jet Orders Through 2015

By Christiana Sciaudone and Juan Pablo Spinetto -
Jan 23, 2014

Embraer SA (EMBR3), fresh off leading a
round of U.S. regional jet orders, may sell as many as 150
planes through 2015 as carriers seek more economic upgrades,
said Chief Executive Officer Frederico Curado.

The planemaker’s strategy of updating its jets rather than
building an all-new family of planes is paying off as U.S.
airlines are expected to substitute 600-800 50-seater regional
jets for larger and more fuel-efficient planes, Curado said.
Embraer foresees about 150 of those will be updated in the next
two years. New competitors, like Mitsubishi Aircraft Corp., are
failing to keep pace with Embraer.

“We conquered a good part of the first wave of orders last
year,” Curado said in an interview in Davos, Switzerland.
“Let’s see if we can maintain that market share with the second
wave.”

Embraer is investing about $1.7 billion in its second-generation E-2 jet program to compete against Mitsubishi, Sukhoi
Co. and Bombardier (BBD/B) Inc., Curado said.

“Mitsubishi and Sukhoi will take some market share, for
sure, but Embraer is the world leader,” Curado said. The first
E-2 model is on schedule and expected to start delivery in 2018.
Embraer has firm orders for 150 of its new jets.

The optimism comes as the Sao Jose dos Campos, Brazil-based
company’s main competitor, Montreal-based Bombardier, cut 1,700
aerospace jobs this week to preserve cash after delaying its new
CSeries jets for the fourth time. Embraer expects to maintain
its position as the biggest seller of regional jets after
announcing firm orders from U.S. airlines for 327 new and
second-generation planes last year.

Little Growth

Bombardier’s CSeries program has cost $3.9 billion so far,
and the company has secured 198 firm orders. The CSeries won’t
enter into commercial service until late 2015 instead of this
year because it needs more time for tests.

Embraer deliveries and revenue should see “a little
growth” in 2014 compared to last year, Curado said. The company
delivered 90 commercial jets and 119 executive jets last year
and annual revenue is estimated at 14.2 billion reais ($6
billion), according to 16 analysts surveyed by Bloomberg.